Dip In Share Leaves ITV Facing Revenue Shortfall
ITV could face a deficit of around £100 million in revenue as big-brand advertisers seek to negotiate more competitive deals following the broadcaster’s recent decline in audience share.
The loss could hit ITV as a result of the contract rights renewal scheme introduced to prevent the newly merged broadcaster from monopolising the market for airtime sales. Under the scheme advertisers are able to negotiate lower fees if ITV’s audience share falls consistently for a year.
According to reports, the latest figures from BARB show that ITV’s share of commercial impacts has declined, despite a spate of high-profile ratings winners such as Coronation Street. The broadcaster currently receives around £1.7 billion in advertising revenue and is thought that even a 3% dip could cost the company £100 million.
However, ITV remains optimistic and last month the company claimed that the forthcoming Euro 2004 football championships would bring in a surge of advertising, with high demand for commercial spots during its coverage of the event proving hugely profitable.
The broadcaster also claims to be enjoying the ‘most buoyant’ airtime advertising market for four years with a number of high-profile motoring, finance, alcohol and sports manufacturers clambering to associate themselves with the event (see ITV Sees Revenue Surge As Euro 2004 Approaches).
This is reiterated by the latest agency estimates complied by MediaTel Group, which show ITV’s advertising revenue to be on the increase following a sharp decline over the last few years. The company enjoyed a 1.6% year on year in April to just under £148.2 million.
Research carried out by ITV during the last Euro football event showed that the broadcaster’s coverage of the championships delivered an average audience of more than 7 million, peaking during the England versus Portugal game, attracting just under 15 million viewers. The tournament delivered a reach of three quarters of men aged between 16 and 34 overall (see Feature: Advertisers Line Up As Euro 2000 Kicks Off).
ITV: 020 7843 8000 www.itv.com
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